Financial Analysis: International Consolidated Airlines Group (OTCMKTS:ICAGY) and LATAM Airlines Group (NYSE:LTM)

LATAM Airlines Group (NYSE:LTM) and International Consolidated Airlines Group (OTCMKTS:ICAGY) are both large-cap industrials companies, but which is the superior business? We will compare the two businesses based on the strength of their analyst recommendations, dividends, risk, institutional ownership, profitability, valuation and earnings.

Volatility and Risk

LATAM Airlines Group has a beta of 3.64, meaning that its share price is 264% more volatile than the S&P 500. Comparatively, International Consolidated Airlines Group has a beta of 1.72, meaning that its share price is 72% more volatile than the S&P 500.

Profitability

This table compares LATAM Airlines Group and International Consolidated Airlines Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
LATAM Airlines Group	9.69%	101.21%	8.80%
International Consolidated Airlines Group	9.21%	79.81%	14.56%

Institutional and Insider Ownership

0.0% of International Consolidated Airlines Group shares are owned by institutional investors. 7.8% of LATAM Airlines Group shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Dividends

LATAM Airlines Group pays an annual dividend of $0.14 per share and has a dividend yield of 0.3%. International Consolidated Airlines Group pays an annual dividend of $0.19 per share and has a dividend yield of 1.8%. LATAM Airlines Group pays out 2.6% of its earnings in the form of a dividend. International Consolidated Airlines Group pays out 5.0% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.

Valuation & Earnings

This table compares LATAM Airlines Group and International Consolidated Airlines Group”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
LATAM Airlines Group	$14.49 billion	0.84	$1.46 billion	$5.44	7.79
International Consolidated Airlines Group	$37.57 billion	0.63	$3.78 billion	$3.82	2.84

International Consolidated Airlines Group has higher revenue and earnings than LATAM Airlines Group. International Consolidated Airlines Group is trading at a lower price-to-earnings ratio than LATAM Airlines Group, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for LATAM Airlines Group and International Consolidated Airlines Group, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
LATAM Airlines Group	0	2	6	0	2.75
International Consolidated Airlines Group	1	0	1	0	2.00

LATAM Airlines Group currently has a consensus price target of $66.27, indicating a potential upside of 56.44%. Given LATAM Airlines Group’s stronger consensus rating and higher possible upside, research analysts clearly believe LATAM Airlines Group is more favorable than International Consolidated Airlines Group.

Summary

LATAM Airlines Group beats International Consolidated Airlines Group on 11 of the 16 factors compared between the two stocks.

About LATAM Airlines Group

LATAM Airlines Group S.A., together with its subsidiaries, provides passenger and cargo air transportation services in Peru, Argentina, the United States, Europe, Colombia, Brazil, Ecuador, Chile, the Asia Pacific, and rest of Latin America. The company operates in two segments, Air Transportation; and Multiplus Coalition and Loyalty Program. It provides passenger transport services to approximately 140 destinations in 25 countries with a fleet of 322 aircrafts, well as operates loyalty programs. The company was formerly known as LAN Airlines S.A. and changed its name to LATAM Airlines Group S.A. in June 2012. LATAM Airlines Group S.A. was founded in 1929 and is based in Santiago, Chile.

About International Consolidated Airlines Group

International Consolidated Airlines Group S.A., together with its subsidiaries, engages in the provision of passenger and cargo transportation services in the United Kingdom, Spain, the United States, and rest of the world. It also provides aircraft leasing, aircraft maintenance, tour operation, air freight operations, call centre, ground handling, trustee, retail, IT, finance, procurement, storage and custody, aircraft technical assistance, human resources support, and airport infrastructure development services; and manages airline loyalty programmes. The company operates under the British Airways, Iberia, Vueling, Aer Lingus, and LEVEL brands. It operates a fleet of 582 aircrafts. The company was incorporated in 2009 and is headquartered in Harmondsworth, United Kingdom.